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Switching to Vanguard

August 12th, 2013 at 03:53 am

I've been meaning to do an analysis for a while to see how my Vanguard accounts are doing compared to my accounts with a broker at Morgan Stanley. Vanguard is in a low-cost fund that I picked, and the accounts at Morgan Stanley are personally managed.

Well... the result is that the Vanguard funds consistently did better (way better!). Enough better that it's not just due to the higher fees (.25% for Vanguard v. 1.5% at Morgan Stanley).

For approximately a year, the Vanguard fund made 13.8% and Morgan Stanley made 4.5%.

I needed to do the analysis because I figured if having my accounts personally managed overcame the higher fees then I would keep my accounts with Morgan Stanley. But it's the opposite! Grrr!

3 Responses to “Switching to Vanguard”

  1. Wino Says:

    What was the allocation you gave to the MS/DW folks? If you told them to protect principle, then they will have that as part of the allocation. I would talk to the broker before abandoning him.

  2. MonkeyMama Says:

    We had a similar experience in our 20s. (When the stock market was really doing well). I think MS and ML are some of the worst. They charge like 5 different kind of fees, so I think it really does just come down to fees. (In our case, higher expense ratios, loads, and then account management fees on top of that).

    I think you'd be infinitely better without them. Wink

  3. baselle Says:

    No need to grr. You learned, you fixed, and if an active manager comes sniffing around again, you'll still have your reasons to say "not interested". Better to know at 46 than at 76.

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